“Thank you all for coming tonight. I continue to be extremely impressed with the involvement of the citizens in the business of the Port. As I said at the Town Hall meetings last week, if this project is to be successful, then it has to be a broad-based community supported project.

This meeting was called to report on the Port’s due diligence with regard to a working agreement with Godstream Technologies LLC, as I called for during last Friday’s meeting.

There has been a fair amount of public outcry and I have been, and continue to be, concerned about the public perception of the Port. I have been asked numerous questions regarding the PROCESS, such as (1) Why didn’t the Port go out for an RFQ? (2) Why are you hiring someone that belongs to a cult or commune? (3) Why Godstream Technologies? (4) Why aren’t there specific deliverables at specific time frames in the contract?

We will attempt to answer all the above questions to your satisfaction tonight and more, if you have them.

First, let me say that I, personally, will be calling for certain things for this contract to go forward:

A report from staff that their due diligence findings have been found to be NOT NEGATIVE

A report from staff of the recommendations of changes to be made within the contract itself, including specifics of deliverables, timelines, and payment structure, specifically reducing the upfront monies paid out to an amount more in line with the norm—say 30-40%, and an exit clause.

A performance bond to be issued

As for what’s been done since Friday, the staff has undergone a due diligence process that included reference checks of character, past projects, and his team. The staff will speak directly to their findings later. But I do know that the references involved associations with Noah Israel through public and private entities that span 20+ years and the Better Business Bureau, and the Federal Black list.

This person came to Commissioner Mahan, the idea was scoped out through Mr. Mahan, and Mr. Mahan has talked to the businesses with letters of intents, and some of the references. Commissioner Mahan has been the champion of SEED and has been the closest to the project over the long haul. For that reason, I am going to turn this meeting over to Bill to expound on what I have already said. Then, I will ask Commissioner Stokes for comments, then, we will all have a chance to hear from and ask questions of Mr. Noah Israel, then I will take public comment.”

Commissioner Mahanasked for staff to report on reference checks.

Tim Thomson, Chief Operating Officer, reported that comprehensive due diligence on Noah Israel and Godstream Technologies was performed. Mr. Thomson listed the categories of contacts and stated the timeframe of Mr. Israel’s association with these contacts ranged from one year to twenty years. Common characteristics reported were that Mr. Israel was responsive and knowledgeable; understands land issues; impressed with informational streams available to him; works on cutting edge extraordinary projects; talented thinker especially with eco-friendly projects; honorable and reputable businessman; all agreed capable of performing scope of project. Mr. Israel’s project experience is mostly homebuilding and small industrial buildings; nothing recent. Currently focused on 75-acre residential project in Arlington with 35 homes called Lake Armstrong Community. His approach is to mobilize team of specialized consultants to complete tasks but none have been initiated/completed in recent years. There were no hits on the Better Business Bureau, license is current, not on the Federal excluded parties list, and in conclusion, there were no negative findings.

Commissioner Mahan asked Mr. Israel to provide some background information and why he is interested in this project.

Noah Israel stated this project represents what he has been working toward as he has been involved in a number of construction projects and has seen code level work failing which inspired him to look deep to supply solutions that he could feel good about and would create a healthy environment. He stated he was motivated to search for building materials that would incorporate a green standard and to bring together a team of experts that have proven their ability to put together quality construction and livability. He also discussed his vision for solar system alternatives.

Commissioner Stokes stated that during previous discussions, Mr. Israel stated that he could get the Olympic View Business Park (OVBP) Building #1 rented at a market value of 83 cents a square foot. Commissioner Stokes asked Mr. Israel how soon he could have the building leased and if the tenant(s) were willing to locate with contingencies?

Mr. Israel stated he could have someone in the building by January if terms were met; however, he was not prepared to define the scope of negotiations. He said the reason companies are interested in the Port of Bremerton is because of the far-reaching and attractive opportunity provided by the SEED premise. The market rate quoted of 83 cents is premium and higher than market, but companies may be willing to spend a little more to help SEED come to fruition.

Commissioner Stokes stated his concern that Mr. Israel previously said he could bring in a tenant at 83 cents and now states that 83 cents is over market. Commissioner Stokes questioned what type of security the Port has before spending $50,000 on this contract.

Commissioner Mahan stated the two foremost items the Port expects is 1) for Godstream to show us materials and processes that can get the price of the building down and 2) to provide letters of intent of which two have already been provided prior to contract execution. The Port has also received a letter of intent from Woslin International to provide $8M in financial assistance to pay for equipment and set-up for a geopolymer board company that is willing to locate here. The Board discussed further.

Commissioner Kincer asked Ken Attebery to speak on staff recommendations. Mr. Attebery stated that staff is prepared to talk about a course of action if the Board chooses to move forward with this agreement. Staff would then discuss with Mr. Israel more specific areas of the agreement such as detailed scope, work products, timing of payments, potential building refinements and how the building moves forward with the plans of today. The letters of intent and lease negotiations are clearly separate issues from the analysis of the incubator building construction.

Commissioner Mahan spoke to the issue of approving this contract without issuing a request for proposal (RFP) stating that the Port is under a specific timeline because of the federal grant requirements and it would take between 90-120 days to complete the RFP process. He also stated that the reference checks he and staff performed have shown that Mr. Israel is honest, qualified, and knows the building supply chain especially as related to clean tech and green. Commissioner Stokes said he was not questioning Mr. Israel’s integrity; he is concerned about leasing the building the Port already has and it seems as though there is now all kinds of contingencies before we can go forward with leasing. Commissioner Mahan agreed saying the letters of intent were for that building and the Port would be unwise to not enter into negotiations.

Commissioner Kincer confirmed that the reference checks were neutral to positive, but missing was any information related to Mr. Israel’s experience in project management; especially with LEED buildings. She asked Mr. Israel to explain why he was the person to go forward with this project. Mr. Israel responded that his team has built large structures including schools and have exceeded expectations with the types of materials used. He and his team have the ability to use site generated materials and have handled large residential coordination of approximately 20 homes from start to finish including trucking across country, stage development of site, and putting up the homes within an eight week timeframe. He has also constructed 30-unit apartment buildings from the ground up. He stated he was interested in this project because he is passionate about it on every level.

Public Comment

Ron Ross, Kitsap County resident, questioned details of the agreement such as the scope of work and whether payment is based on hopes of performance or after a lease is signed. He also questioned whether Mr. Israel was a licensed real estate broker or a licensed contractor. He stated a licensed real estate broker does not get paid until after they perform. He recommended the Board not go forward with this contract based only on letters of intent.

Mr. Maury, citizen, stated it was his understanding that the Port hired the best firm available to design the building so he questioned why the Port was hiring someone else to evaluate that design. Commissioner Mahan stated that this agreement deals with the products and systems that go into the building.

Kathy Seamans, citizen, questioned why a facilitator is needed if there are two or three businesses that are interested in that building. Commissioner Mahan responded that it is common to pay a commission to an agent that brings forth a building tenant. This is not a commission situation, but the real issue is not the letters of intent; if Mr. Israel can save $1M on the building, he has earned the $50,000.

Russell Porterfield, citizen, questioned whether the company considering moving into the building is one that requires rail access. Commissioner Kincer confirmed that they do and that rail access is already there. Mr. Porterfield questioned why the Port would pay Mr. Israel up front and if Mr. Israel was ready to sign a lease to move into the building once this contract is signed.

Doña Keating asked the following specific questions:

Is the Port obligated by competitive bidding laws or are they exempt?

Does the Port have a project roster?

Was the reference check specific to project management experience or simply character references?

How would the LEED platinum standard still be met if the cost is reduced from $7M to $5M?

Can the scope of work be described so the public understands what is being paid for and what is expected?

When it was decided the Mithun design wasn’t what was wanted, was there a check with other companies that had first hand experience with this type of project such as Islandwood?

What is Godstream’s corporate structure? (it was confirmed they are an LLC)

What percentage of this contract are the letters of intent?

Ms. Keatingpresented a list of vendors from Islandwood to the Board explaining that she feels this should be part of the strategy; they could be recruited as potential tenants. The vendors on that list provided sustainable materials that were used in building Islandwood to LEED gold standard. She stated she felt the Board could have done a much better job of due diligence; policies and procedures need to be in place.

Gordon Walgren, Port Attorney, addressed some of the questions raised.

No contract has yet been signed; reference to scope of work is detailed in the contract and he itemized those details.

The Port’s CFO has explained that the laws of the State of Washington for public entities would prohibit any type of payment before services are performed. He recommends the Port not pay up front, but provide incremental payments.

A roster for small works not personal services is maintained by the Port.

Louis Soriano, citizen, stated it is important to understand that signing as an LLC reduces their liability and it is unknown who the principals are. He stated he feels the company should start zero-based and should not have access to all the information that is now in the possession of the Port such as drawings, etc. He questioned why the Port would reimburse for ‘reasonable and necessary expenses at cost’ and why an adjustment of compensation is allowed for an increased amount in the length of the contract.

Mr. Israelstated the following in response to Commissioner Kincer’s questions

He is not a licensed real estate broker or licensed contractor.

Does not hold an engineering license; however, he hires licensed professionals.

Does not hold a degree; however, the team is fully degreed.

Commissioner Kincerasked for clarification from Mr. Israel regarding a previous discussion they had regarding Godstream leasing and/or subleasing the building. Mr. Israel responded that it would be discussed in negotiations; it is a possibility that Godstream could lease the building with provisions for subleasing. Commission Stokes stated his understanding from Mr. Israel during previous discussions was that Godstream was interested in leasing that building or could provide a company that would. Mr. Israel stated that Godstream could do that but it would have to be under certain conditions.

Commissioner Kincerasked Mr. Thomson to describe whether in doing the due diligence, he received character references or project management building expertise. Mr. Thomson described some of the comments explaining that most were character reference, but a few were project management.

Commissioner Mahanread the following prepared statement:

“During the past ten days I have met with three companies from the Clean Tech Industry Sector. The companies are start up companies that will manufacture or produce solar dishes, electric powered autos and diesel oil from algae. These companies are currently raising private capital to build manufacturing plants to achieve their goal. The one common theme from two of the companies is “I would like to locate at the Kitsap SEED site, but only if the SEED incubator building is constructed as planned.”

The Port Commission has had the Kitsap SEED “on pause” for almost ten months since February of this year. The pause was supposed to take 45 to 60 days to accomplish four tasks which would determine if the project would proceed.

One of the issues facing us was the cost of the incubator building, a LEED platinum certified building. We asked our architects to reduce the cost of construction and their suggestion was to eliminate functions that were important to the Kitsap SEED project. The architects did not consider different materials or systems in their suggestions for reducing the cost of the building.

Other criticisms of the Kitsap SEED project include the lack of private investment and the lack of tenants for the incubator building.

As I said before, I was approached by Mr. Noah Israel concerning our project and in our discussions, he indicated that he could help solve the problems we were facing in trying to reduce the cost of the incubator building, identifying and signing up businesses and developing private investment in the project. I checked out Mr. Israel’s references and found that he is regarded as an honorable and credible person with integrity. He is also dedicated and thorough in his tasks. As a result, I made a motion that was passed to offer Mr. Israel a contract that would answer some of the criticisms of the project.

We all know what happened when the news hit the stands. Character assassination was the order of the day. The detractors of the project could not attack the concept of hiring someone to make the project a reality so they stooped to character assassination. I thought I had seen it all in the Presidential election but I learned fast that some people in Kitsap County will stoop to the lowest of low to further their goal of stopping the SEED project.

So, where are we today? Without a contract, Mr. Israel has garnered two letters of intent for companies to move into a building that has been vacant for eight months and has arranged financing for $8M to bring in equipment and supplies to build sustainable product to be distributed locally and nationally from the Port of Bremerton. He has accomplished more in the past four weeks to make the SEED project a reality than we have in the past eighteen months.

Now, back to my opening comment. The concept that the Kitsap SEED project was built on was if the Port builds a business park that embodies the “green” philosophy, we will attract companies in the Clean Tech Industry Sector. Two companies in the last ten days have said they would like to locate at our SEED business park but will only follow through if we build the incubator. We have the right location for this project with rail access, an airport and three naval installations close by and it is the right time with a new President and Washington State Governor dedicated to developing alternative fuels and working global warming issues. What we need now is the leadership to continue on with this contract and get the incubator building built. The Port of Bremerton and Kitsap County are leaders with the project but other communities are waiting for us to fail so they can take our ideas and run with them. The bottom line is, we need to “hit the play button” cancelling out the pause and get on with the Kitsap SEED project.”

Commissioner Stokesstated he took exception that this project is lacking leadership; he feels it is lacking common sense and he would be the first one to approve the Godstream contract once the building is leased as the Port would then shed a $250,000 obligation which could be used to reimburse GO bonds for the incubator.

Commissioner Kincerprovided the following comments:

“I have always supported the SEED project and especially in these times with the energy crisis and a new President that is making the clean technology area a priority, this is the right time to move forward.

Since taking office/being elected in January 1998, I have always thought in terms of using my own checkbook when asked to approve projects or determine priorities at the Port. The staff, and especially our CEO, have heard this from me many times over the years.

But, we are here tonight to discuss the reconsideration of the contract approved last Thursday with Noah Israel. I called for the staff to perform its own due diligence the first part of this week and report to us by mid-week, which is today. This due diligence is for building a multi million dollar building and what we’ve found out here tonight is this:

I’m being asked to move forward on a contract with no specifics as to the scope of work, timeframe, payment schedule, and exit clause.

No project management experience

No financial statements that were promised

No answers as to how much the consultant is looking to lower the price of the building—just to lower it—in terms of percentages or dollar amounts

When asked why he’s the guy—answered “passion”. Need so much more than passion

Finally, when I met with Noah at Anthony’s, he committed to bringing 3 LOIs and locating them in the Business Park Building. If the leases couldn’t be readily produced, then he committed to leasing the full building and then subleasing. Now he says I misunderstood. But, Commissioner Stokes just pointed out that he had the same experience and he misunderstood, too?

I am sad. I came here tonight with different intentions and wanting to move forward. I am not prepared to do that at this time with this consultant. It is not in the best interest of the Port!”

Commissioner Mahanmade a point of order as the motion to approve the contract had already been made and approved on November 13.

Having voted on the prevailing side of a motion that authorized the Port to enter into a contact with Godstream LLC, Commissioner Kincer now moved that the motion authorizing such contract be rescinded. Commissioner Stokes seconded.

Russell Porterfield, stated he is not against the SEED program, but against an empty building and the Port spending money; finish with leasing the building and then charge on with SEED.

Doña Keating, requested the Board stop going back and forth. The issue is that the Port did not do due diligence before taking a vote. It is the inconsistency that is frustrating. The Board is giving mixed messages and the public doesn’t understand. If project management is what you are looking for; go forward with that. It is not adequate to just say you are doing away with the contract; you have to tell us what you are going to do. The incubator is more than a building, it has much larger potential. Need to stop muddling issues between the incubator and the Business Park building; they are not the same.

Mr. Israel clarified some points on his education level saying that he has spent a lifetime on the fundamentals that created LEED certification and has been providing LEED materials since it was a concept. His team brings a high level of material research and project management with their reputations, life degrees, and certifications. Why I feel I could make a difference is my passion in setting a standard in the community by using technologies and materials and using local labor forces to help the spirit of the SEED project.

Martha Lawson stated she felt it important to speak about Noah from someone who lives with him. She said he is the most amazing problem solver she has ever seen and he knows how to connect with those that have the necessary degrees. She spoke to his passion about what the SEED project represents and stated that it is a sad decision to discontinue the contract given what he could bring to this project.

Question was called. Motion carried. Yes: Kincer, Stokes; No: Mahan.

With no further business to come before the Board, President Kincer adjourned the meeting at 9:15 p.m.